In a recent settlement announced by the U.S. Department of Justice, a California-based flooring company agreed to pay $8.1 million to resolve allegations of customs fraud—thanks to the actions of a whistleblower acting under the False Claims Act’s qui tam provision.
Evolutions Flooring Inc., along with its owners Richard and Brian Abcarian, was accused of evading U.S. import duties by falsely labeling Chinese-manufactured flooring products as originating from Malaysia. Between 2011 and 2019, the company allegedly used this scheme to circumvent anti-dumping and countervailing duties imposed on multilayered wood flooring from China.
Under federal trade laws, importers must truthfully declare the country of origin for all goods entering the United States. The government alleged that Evolutions Flooring submitted false documentation to U.S. Customs and Border Protection, routing shipments through Malaysia to avoid tariffs—triggering False Claims Act liability.
This case was brought to light not by routine customs enforcement—but by a private individual known legally as a relator. Under the qui tam provision of the False Claims Act, private citizens with knowledge of fraud against the federal government may file lawsuits on its behalf. If the case leads to a financial recovery, the whistleblower may receive a share of the settlement.
The False Claims Act remains a vital tool for preventing fraud — not only in healthcare and government contracting, but increasingly in the international trade sector. As global supply chains expand and duty circumvention schemes grow more complex, whistleblowers will remain an essential source of investigative leads for enforcement.
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